What is a Payday Loan?

A payday loan – which might also be called a “cash advance” or “check loan” Payday loan is very popular in UK and it is routine work for the companies to issue the loan, most important they are releasing the loan money for the middle class income group who are doing their jobs in different places of UK. Payday loan is a loan designed to be taken for a short period of time, usually they are advertised as a means to fund unexpected purchases that rise a few days before the end of the month, when you are needy for cash and waiting for payday. Unlike traditional personal loans they are prepared over days rather than years, so can be used as a stop gap until your incomes arrive, and generally for £500 or less, that are normally due on your next payday.

According to the figures there are almost the 1.3 million people are getting benefits from this payday loan opportunity according to the report of CCCS, Consumer Credit Counseling Service, and further the amount of payday loan UK is issued estimated £ 1.2 billion borrowed by middle class employees in this recent year. Some ways that moneylenders might give you the loan funds include: providing cash or a check, loading the funds onto a prepaid debit card, or electronically depositing the money into your checking account.

The main difference from other types of loans is that payday loans tend to last a short period, only about one or two weeks, to be repaid upon you getting your next pay. Due to their shorter length, there will be a higher APR and a quite small credit limit. Loans are also promoted via toll-free telephone numbers and over the Internet.

The proper time to use such a loan could be in examples like the car repair bill above, but actually can apply to any situation where you know you’ll have the money you need in your next salary, but you need it straight away. It wouldn’t be suitable to take out a payday loan over and over again to cover a recurring charge;it would not be a good plan to use it on something unnecessary. Only use a payday loan for a sudden need or emergency.

Payday loans are short-term loans for small amounts of money. They are available from high street shops and internet sites. Payday lenders cannot charge more than 0.8% interest a day or a maximum of £24 if you borrow £100 over 30 days. If you pay your payday loan late, you’ll usually also be charged a payment fee and daily interest on top

The lender should also explain the main characteristic of the loan, including how much you will have to pay back, what happens if you do not pay the loan back, that you may be charged extra if you do not pay the loan back on time and that the loan is not suitable for long-term borrowing.